Muddy yet clear-cut: How Chinese investors are turning jungle into Indonesia’s new capital

The ambitious project to relocate Indonesia's capital from Jakarta to Nusantara on Borneo is forging ahead, with significant contributions from Chinese investors. While the journey through Borneo's jungles to reach the nascent IKN site is still rugged, the vision for a new administrative center is steadily taking shape, driven in part by substantial Chinese capital.

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Eventually, if all goes according to plan, it will be a brand new city housing the 287 million-person archipelago’s seat of government.

Indonesian government figures reveal that Chinese investors injected US$29 million in 2025 and have committed an additional US$3.08 billion. This financial backing is particularly critical during a year of government budget constraints, making Chinese firms a cornerstone of the new capital's development. The move aims to alleviate the severe issues plaguing Jakarta, including gridlock, pollution, and land subsidence.

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For now, it is still a jungle. But investors from China are clearing away a lot of that land to build the capital. Without them, the flora and fauna would keep a firm grip on the area.

Leading the charge among Chinese enterprises is Shenzhen-based Delonix, developing a mixed-use commercial hub. Tech giant Huawei Technologies is collaborating on smart city infrastructure, while Citic Construction is involved in building new homes. Furthermore, Chinese companies are undertaking substantial road, tunnel, and mass transit projects, collectively valued at trillions of rupiah, underscoring the depth of their involvement.

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Indonesian government figures show that Chinese investors had spent US$29 million during 2025 to develop pieces of the capital and committed US$3.08 billion more.

From an Indonesian perspective, this influx of Chinese investment is viewed with a mix of anticipation and pragmatism. While the scale of development is impressive, the reliance on foreign capital, particularly from China, is a notable aspect of the IKN project. The local population generally welcomes the development, hoping it brings progress and economic opportunities. However, the long-term implications of such significant foreign involvement, especially in a project of national importance, are a subject of ongoing consideration. This contrasts with Western media coverage, which might focus more on geopolitical implications or environmental concerns, whereas here, the immediate focus is on the tangible progress and the economic partnerships enabling it.

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The Chinese investors, a pillar for the new capital’s construction during a budget cut year, hope to cement long-term relations in the massive Southeast Asian market and most locals are keen to see what they can do.